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Iran’s Threat To Pull Out Of JCPOA Could End EU - US Divide

U.S. Secretary of State Mike Pompeo is welcomed by EU Foreign Policy chief Federica Mogherini ahead of a meeting at the EEAS building in Brussels, July 12, 2018
U.S. Secretary of State Mike Pompeo is welcomed by EU Foreign Policy chief Federica Mogherini ahead of a meeting at the EEAS building in Brussels, July 12, 2018

The patience of Iranian leaders is seemingly running thin as six months after the US pull-out from the nuclear deal, EU's promise to save the agreement has not materialized and its Special Purpose Vehicle (SPV) to facilitate Iran's trade is far from operational.

In the meantime, Iran does not appear to be convinced by France and Germany's promise this week to take the lead in the SVP initiative.

At least three Iranian officials, Nuclear Chief Ali Akbar Salehi, Foreign Minister Mohammad Javad Zarif and his deputy Abbas Araqchi have said during the past week that "there is a limit to Iran's toleration."

Zarif explicitly told the Europeans that they should accept the cost of addressing their security concerns. "You cannot swim without getting wet," he told Europeans.

In one of his latest statements on the subject, Araqchi said, "Re-instating US sanctions has reduced Iran's benefit from the Joint Comprehensive Plan of Action (JCPOA) to nil. The balance between 'give' and 'take' in JCPOA has been disrupted… The deal will not survive if Iran cannot benefit from it… It is essential that EU's SVP starts to work."

In another development, Iranian Atomic Energy Organization Chief Salehi warned "There will be undesirable consequences if Iran cannot benefit from the JCPOA."

In the absence of a clear response on the part of Europeans to these warnings and threats, The Wall Street Journal wrote, " The European Union’s announcement that it would establish a special payments channel to maintain economic ties with Iran sent a clear message to Tehran and Washington: Europe is intent on trying to save the 2015 nuclear deal," adding that the participating European states are going to own and host the financial institution that is going to facilitate transactions with Iran.

Six months after the US pull-out from the deal with Iran and one month after full US sanctions on Iran were re-instated, only a six month exemption from sanctions for major customers of Iran's crude oil and natural gas delayed the full implementation of the United States' policy of maximum pressure on Iran. Europe's measures to save the deal and facilitate trade with Iran are the center-piece of Iran's resistance against the U.S. sanctions.

The recent tough talk by Iranian officials could be viewed as Iran's pressure on Europe to hasten its initiative to support Iran in the short run.

The fragile situation and the gap between EU's promises and actions have perhaps pushed the weakened JCPOA forward on its track to death. It is now more likely that 2018 could see the end of the nuclear agreement by world powers with Iran. Most assessments indicate that Russia and China cannot save the JCPOA and meet the Islamic Republic's minimum demands without support from EU.

EU is aware of the situation and says it has the will and determination to save the agreement, but there are increasing doubts about its capability to do so. Austria and Luxemburg's refusal to host the financial channel to support Iran's foreign trade has added to pessimism and despair.

At the same time, Europe's failure to implement and run the SVP has changed the balance of power inside Iran to the benefit of hardliners who have always had their doubts about Europe's ability to act on its promises. This has brought the Rouhani administration under pressure.

An impeachment push against Zarif and parliament speaker Ali Larijani are indications of hardliners becoming bolder.

In the meantime, the US has increased its pressures on European companies while European states cannot convince these companies to work with Iran.

Iranians are aware of the situation and have minimized their demands from Europe. Nevertheless, they cannot wait forever and they cannot justify remaining in the nuclear deal if they lose their hope of support from Europe. It is unlikely that in 2019 Iran would keep its nuclear activity at the level agreed in the JCPOA if its minimal expectations from Europe are not met, although it is not clear what will Iran do if it pulls out of the deal.

Iranian officials' recent warnings and threats is inconsistent with their usual claim of Tehran's nuclear program being peaceful. The West and even Russia never bought that claim. Tehran may be using these threats and warnings as a leverage to exert pressure on Europe, but Tehran's return to pre-JCPOA status would strengthen the arguments of Israel, US and Saudi Arabia and reinforce their claims about Tehran trying to threaten the Middle East and beyond through nuclear power.

Iran's threat could be too costly even if officials are using them only to exert pressure on Europe. These threats, as well as IRGC commanders' recent bluster about attacking US bases in the region might escalate regional tensions. Taking uncalculated risks might encourage EU countries to forget about detente with the Islamic Republic and would bring EU's positions closer to those of the United States.

The views expressed in this analysis are the author's own and do not necessarily represent those of Radio Farda.
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    Ali Afshari

    Ali Afshari is an expert on Iran and an analyst of Iranian affairs, residing in Washington D.C. Mr. Afshari occasionally contributes analysis to Radio Farda.